Amazon has revolutionized the way the world shops. The ‘Everything Store’ has shaken brick-and-mortar retail by offering millions of products and free shipping for members. Amazon now accounts for nearly half of all eCommerce purchases in the US and 5% of the entire country’s retail sales. So, it’s no surprise that many investors are keen to buy Amazon shares.
On top of that, Amazon has a booming cloud services business. Amazon Web Services controls roughly one-third of the world’s cloud infrastructure. Cloud computing now makes up more than 13% of the company’s total revenue, and that number will likely continue to grow as cloud computing becomes even more ubiquitous.
If you’re looking to invest in Amazon shares but don’t know where to get started, this guide will cover everything you need to know. We’ll show you how to buy Amazon shares in the UK and compare five brokers you can use. We’ll also dive into the bull’s case for why Amazon may be a good investment so you can decide whether these shares are the right choice for your portfolio.
Table of Contents
3 Quick Steps to Buy Amazon Shares
Want to buy Amazon shares right away? Follow these three simple steps to get started:
Step 1: Find an Online Broker
Choose a top stockbroker that allows you to buy Amazon shares, such as eToro.
Step 2: Deposit Money
Add funds to your brokerage account using a debit/credit card, e-wallet, or bank transfer.
Step 3: Buy Amazon Shares
Search for Amazon shares, enter how much you want to invest, and click ‘Buy’.
75% of retail investors lose money when trading CFDs with this provider.
Where to Buy Amazon Shares
In order to buy Amazon shares in the UK, you will need to use a licensed stockbroker. Thankfully, there are many of these brokers available, and a number of them don’t charge trade commissions when you buy shares.
Before we dive into comparing brokers, it’s important to note that there are two main ways you can get exposure to Amazon shares. First, you can buy Amazon shares outright. This is generally best for long-term investors, since you own the shares and are eligible for dividends if Amazon ever issues them.
Second, you can buy contracts for difference (CFDs) for Amazon shares. CFDs are derivatives that give you exposure to the share price, but you don’t actually own shares. The advantage of CFD trading is that you can use leverage and increase the effective size of your investment.
With that in mind, let’s take a closer look at top UK share brokers you can use to buy Amazon shares:
1. eToro - Market Leading Social Trading Broker
eToro is one of the most popular brokers in the UK for buying shares. This trading platform enables you to choose between buying shares outright or trading CFDs, meaning you can choose to own assets or go short and trade CFDs with up to 1:20 leverage. Plus, you can access shares of more than 800 companies from around the globe.
One of the best things about eToro is that it’s also a social trading network. You can interact with other traders, see what they’re buying and selling, and start discussions about the merits of a specific asset. eToro also enables copy trading, meaning you can copy the portfolios of top investors with the click of a button!
eToro is 100% commission free for share trading, as well as for commodity trading, forex trading, and cryptocurrency trading. You will have to pay the spread for trades, but the spread for share trades is very competitive. There’s a low withdrawal of $5.
This broker supports a fantastic range of payment methods, so if you don’t want to use your debit card or bank account, you can use e-wallets like PayPal and Neteller. There’s a $100,000 demo account in addition to the eToro mobile app, and eToro is also licensed by the FCA, so it’s a very secure platform.
- Copy Trading: Mimic professional traders’ positions
- Global Shares: Trade more than 800+ global companies
- 100% Commission Free: Competitive spreads for share trades
- Trustworthy: FCA regulated
- High CopyPortfolio Minimum: $5,000
2. Plus500 - CFD Broker with Share Price Alerts
Plus500 is a great choice for traders and long-term investors who never want to miss an opportunity. The platform lets you create custom price alerts that can be sent to your mobile device. So, if you want to buy Amazon shares on a dip, you can make sure you know about the next pullback immediately with this broker.
This broker only enables share CFD trading, not buying shares outright. You get access to shares for several hundred companies around the globe, plus leverage up to 1:20 to increase the effective size of your position. There are no trading commissions and the spreads are some of the lowest in the industry.
Plus500 includes a proprietary trading platform for charting and analysis. It’s well designed, user-friendly and includes plenty of technical indicators. However, advanced share traders might find it to be slightly inflexible, as you cannot backtest strategies or create your own custom indicators.
- Price Alerts: Catch the next pullback for trading
- Leverage: Trade share CFDs at up to 20:1
- Beginner-friendly: Easy to use trading platform
- Limited Analysis: No backtests or custom technical indicators
3. Capital.com - UK Broker with AI-Based Trading Bot
Capital.com stands out as one of just a few brokers that have taken advantage of artificial intelligence to help traders. The investment platform gives you access to an AI trading bot that helps you find trading ideas and develop your own strategy. Plus, the platform includes advanced charts with more than 75 technical indicators, drawing tools, and risk management options.
This broker is also noteworthy for offering a large number of educational resources for new traders. You’ll find guides for share trading, forex trading, commodities trading, and cryptocurrency trading to get started. The broker also has a mobile app that is focused entirely on trader education.
Capital.com offers trading for a wide range of shares from around the world and doesn’t charge any commissions on your orders. Spreads are competitive, and this platform only charges an inactivity fee if you don’t trade for an entire year.
- AI Trading: Use a trading bot to find new ideas
- Trader Education: Includes education-based mobile app
- Low Fees: No withdrawal fee and low inactivity fee
- No Backtesting: Doesn’t enable you to test out your trading strategy
4. FXCM - CFD Trading Platform with MT4
FXCM goes a step beyond many other share brokers by giving you access to multiple trading platforms. You can use FXCM’s proprietary charting software for everyday trading and quick technical analysis. Or, for more advanced analysis, strategy development, and backtesting, you can connect your trading account to MetaTrader 4 or Ninja Trader. FXCM even offers social trading through integration with ZuluTrade.
The downside to this broker is that your choice of shares is relatively limited. You can buy CFDs for Amazon shares, but don’t expect to find many companies outside of the US and Europe.
Like the other brokers we reviewed, FXCM doesn’t charge any commissions for share trading and the spreads are lower than the industry average. All users get access to introductory trading guides and a demo trading platform. Plus, FXCM keeps non-trading fees, like the inactivity fee, relatively low.
- Multiple Platforms: Connect to MetaTrader 4, Ninja Trader, or ZuluTrade
- Low Fees: No withdrawal fee
- Supports Backtesting: Test out strategies with Ninja Trader
- Limited Selection: Relatively few shares available through CFDs
5. FinmaxFX - Excellent Mobile Share Trading App
This broker offers CFD trading on more than 180 global shares, including Amazon. Most of these shares are from the US and Europe, although you will find some popular Asian companies as well. You can also choose to diversify your portfolio with forex, cryptocurrencies, commodities, and share indices.
FinmaxFX has one of the better mobile investment apps we’ve seen. It’s available for iOS and Android, and you can also access the popular MetaTrader 5 app on your smartphone. Of course, both FinmaxFX and MetaTrader 5 are also available on your desktop if you want to work on a larger screen for complex tasks like strategy backtesting.
FinmaxFX doesn’t charge any commissions for share trading. However, this broker’s spreads are slightly higher the industry average. On top of that, you may be charged a fee of up to 3% when making withdrawals and there is an inactivity fee that is charged after two months without trading.
- Mobile Trading Apps: For iOS and Android devices
- Includes MetaTrader 5: Advanced indicators, trading signals, and backtesting
- 180 Global Shares: Trade popular US, European, and Asian companies
- High Spreads: Higher than average for shares
Why Invest in Amazon?
Amazon is one of the largest and most dominant companies in the world. In the span of 25 years, it has taken over half of all online sales in the US and controls 5% of the total US retail market. Abroad, Amazon controls 30% of the eCommerce in the UK and its Australian platform is the company’s fastest-growing retail division.
But, at sky-high price of more than £2,000 per share, is Amazon still a worthwhile investment? To help you decide, let’s take a look at some of the reasons that analysts are just as excited about Amazon as ever before.
eCommerce is Still Growing
The number one reason that Amazon shares continue to appreciate is that eCommerce is nowhere near a plateau. Even if Amazon’s market share of total online sales were to stay the same – an idea that seems laughable given that this behemoth is still ramping up in countries like Australia, not to mention crushing the competition in the US – the continued growth of online retail means that Amazon is poised to keep increasing revenue.
eCommerce in the US alone grew by 15% in 2019, and that growth is anticipated to explode even further thanks to the coronavirus pandemic and rapidly changing consumer habits. Globally, eCommerce still makes up just 11% of retail sales. By some estimates, online platforms could grab as much as 25% of all shopping in the next decade. Amazon, as the biggest eCommerce platform in the western world, is perfectly poised to reap higher returns from that trend.
Cloud Computing is a Huge Revenue Stream
Amazon has built one of the largest computing infrastructure systems in the world, and it’s reaping huge benefits from that investment. For the fourth quarter of 2019, Amazon reported bringing in a whopping $10 billion in revenue from Amazon Web Services alone – a 34% increase over the same quarter in 2018. What’s more, cloud computing produced more than two-thirds of Amazon’s operating income. So, the company’s cloud infrastructure is driving its ability to pour money into other areas where it faces more competition.
The other exciting thing about Amazon’s cloud infrastructure for investors is that it represents an enormous moat. While another eCommerce platform could, in theory, challenge Amazon at a relatively low cost, building a global computing network with millions of servers is expensive.
No one is even close to challenging Amazon in the cloud computing market. Amazon controls roughly 48% of the infrastructure-as-a-service market, while Microsoft, the next closest competitor, controls just 15% of the market.
Big Investments are Paying Off
Amazon has made some big investments in recent years in industries like groceries and in building out its own shipping fleet. Those investments are now starting to pay dividends, which means that Amazon could be even more profitable in the future.
Online groceries, for example, are finally gaining market penetration after several years of Amazon’s laying groundwork. The company has the logistics presence in major US cities to make it work, and it now owns the incredibly popular Whole Foods grocery chain to use as a base of operations.
Shipping is also giving Amazon a tangible edge. The company could ship more than half its products with one-day shipping in the US by the end of 2020. Simply put, no other company – Walmart included – can match that. This speed will ultimately help Amazon dominate eCommerce while simultaneously encouraging customers who need a nudge to buy online to take the leap.
About Amazon Shares
Company and Share History
Amazon launched in the Bellevue, Washington home of founder Jeff Bezos in 1995. Initially, Amazon only sold books online, although Bezos envisioned from the beginning as a store that would sell everything to dominate the budding eCommerce industry.
The company went public early on, in 1997, at a price of $18 per share. It turned its first profit in the fourth quarter of 2001, in the midst of the dot-com bust, but was already pulling in more than $1 billion in annual revenue at that time.
Amazon made some prescient moves in the early 2000s, including establishing Amazon Web Services and becoming a major player in cloud computing. Amazon also launched Prime, its free shipping membership, in 2005 and released the Kindle e-reader in 2007.
By the early 2010s, Amazon’s dominance in a wide variety of online marketplaces was clearly established. The company grew from 30,000 global employees in 2011 to 180,000 employees by the end of 2016.
Amazon shares initially started trading at $18 when the company first went public in 1997. The share price remained below $100 until late 2009, when investors began to realise the potential transformation of retail by eCommerce.
The growth in Amazon shares since that time has been explosive. Shares hit the $1,000 benchmark in 2017, and then surpassed $2,000 in early 2020. While Amazon briefly dipped to below $1,700 per share in response to the coronavirus pandemic, the share price has reached a new all-time high of more than $2,500 (more than £2,000).
How to Buy Amazon Shares on eToro
Not sure how to get started with buying Amazon shares through a broker? We’ll walk you through the process using eToro.
We like using eToro to buy shares because it’s entirely commission-free and offers trading for more than 800 companies worldwide. You can also choose between buying shares and holding them or trading share CFDs.
That said, if you decide to use another broker, the process for buying Amazon shares should be relatively similar.
Step 1: Search for Amazon Shares
The first step to buy Amazon shares is to enter ‘Amazon’ in the text bar at the top of the page. Click on the company when it appears in the drop-down menu.
Step 2: Click on ‘Trade’
From the Amazon share page, click on ‘Trade’ to open a new order.
Step 3: Buy Amazon Shares
In the order form that appears, you’ll need to decide on several parameters for how you want to buy Amazon shares:
- Amount: How much money do you want to invest? You can enter an amount in US dollars, or click the ‘Units’ button and then specify how many shares you want to buy. eToro supports buying fractional shares.
- Set Rate: By default, you will buy Amazon shares at the current market price. Alternatively, enter the maximum amount you’re willing to pay to create a limit order. With this type of order, you will only receive Amazon if the price drops below your specified limit.
- Stop loss: Setting a stop loss below the price at which you buy shares is optional, but recommended for every trade. If the share price drops below your stop loss, eToro will automatically sell all your shares.
- Take Profit: If you have a price target on Amazon, you may want to enter a take profit level. This is a price at which eToro will sell all of your shares. Do not enter a take profit amount if you plan to invest in Amazon for the long term.
We recommend against using leverage if you are relatively new to buying and selling shares. Applying leverage to your trades significantly increases your risk if the trade goes against you.
When you’re ready to complete your purchase, click ‘Trade’ to buy shares.
Should I Buy Amazon Shares?
Amazon has been one of the most successful companies in the world over the past decade, and in many ways it shows no signs of slowing down. The company has invested heavily in giving itself a wider moat so that its dominance in eCommerce cannot be challenged.
At the same time, it is poised to remain well ahead of the competition in the cloud computing space for many years to come. Amazon shares may be expensive, but the lofty price is more than justified according to many analysts.
If you want to buy Amazon shares, there’s no better place to do so than eToro. With 0% commission, innovative copy trading tools, and the ability to buy shares or trade CFDs, eToro ticks every box. Simply click the link below to register an account today!
eToro: Buy Shares with 0% Commission
- Buy over 800 global shares
- No commission and tight spreads
- Social and copy trading tools
- Accepts PayPal
- FCA regulated
Does Amazon pay dividends to shareholders?
No, Amazon has never paid dividends to its shareholders. Rather, the company uses its spare profits to re-invest in itself, which has enabled it to grow and increase revenue. This rewards shareholders by making their shares more valuable.
Who are Amazon’s competitors?
Since Amazon operates in so many markets, it has a lot of competitors. Walmart is the largest eCommerce competitor in the US, while Microsoft is the biggest competitor to Amazon’s cloud computing business. In the UK, Amazon’s biggest competitor is Tesco.
What is the advantage of trading share CFDs?
The advantage of trading share CFDs as opposed to buying shares outright is that you can trade with leverage. Leverage enables you to multiply the effective size of your position. So, if you have $100 in your trading account and apply 10:1 leverage, you can buy $1,000 worth of Amazon share CFDs. Keep in mind that leverage also increases your trading risk.